PROCUREMENT
Steve Shirley of MasterCard explains how the NHS can ensure all public money spent is easily auditable. T
he role payments processes can play in driving public sector cost reduc-
tion and enhancing operational effi ciency is evolving. It is driven by continual tech- nological innovation, as well as by demand, where payments are seamlessly integrated into both the purchase-to-pay process and commercial strategy.
Payments processes can play a role in help- ing health service organisations manage the key fi nancial challenges they face. Spe- cifi cally, the need to demonstrate value, the need for control to be maintained and the need to ensure the spending of that public money is auditable.
In many conferences this year, we have heard the message of ‘doing more with less’ – and more recently, ‘doing better with less’. Where are the opportunities for the public sector to make savings that don’t impact frontline services? MasterCard has been providing state-of-the-art procure- ment and other fi nancial management so- lutions to government agencies around the world for many years.
The same evolution of payment types that is seeing cheques and cash disappearing from the high street is occurring in pro- curement across the public sector too. Cards and e-pay solutions have revolution- ised the payments landscape owing to the time and money savings they can bring. Yet already it is clear that in the not too distant future the plastic card may go the way of the cheque, owing to the advances in mo- bile and contactless technology.
A key instrument of driving savings throughout the public sector has been the development of the third generation Gov- ernment Procurement Card (GPC III)
The MasterCard Procurement Card Programme offers a powerful, all-in-one solution that help companies to streamline the entire procurement process which provides:
• A cost effective means of buying low val- ue goods and services (typically remov- ing 95% of administrative effort);
• Enhanced standards of service delivery by making it simpler for employees to buy essential day-to-day items, such as travel tickets;
• Guaranteed on-time payment to suppliers.
In short, GPC is convenient, cost-effective, and a valuable contributor to effi ciency targets. MasterCard GPC solutions are available to health service organisations in the UK through our partner fi nancial institutions AirPlus, JP Morgan and the RBS Group. The programme is intended to be a strategic tool to be employed strategi- cally throughout an organisation spending public money and not just to for the use of processing low-value orders.
Replacing paper-based purchase ordering systems with innovations such as Master- Card Multi Card, it is now possible to issue payment cards to all managers authorised to place orders and then collate all pur- chasing information electronically to track spending volumes and patterns.
Managing expenditure by cardholders on an individual basis by using payments tech- nologies, which allow system administra- tors to place limits on purchase amounts, types of suppliers and numbers of transac- tions. This enables the proper management of expenditure by cardholders on an indi- vidual employee basis and at an individual transaction basis while maintaining the ability to authorise changes in cardholders’ limits at the fl ick of a switch.
Providing transactional data and expendi- ture analyses to ease control over spend- ing by capturing the data produced from the receiving and reconciliation of goods and paying suppliers in a system such as
MasterCard SmartData. Capturing essen- tial data and management information will inform future buying decisions.
Creating accessible opportunities for pri- vate sector suppliers through e-trading hubs helps eliminate disjointed and com- petitive procurement by engaging them in one virtual marketplace where public sec- tor organisations can join together to max- imise their collective buying power.
This also helps level the playing fi eld and can encourage the participation of SMEs in bidding for public sector contracts.
All this contributes to a ‘lean purchasing cycle’ with smoother and faster processing and yet more effective visibility and control.
The best application of new technologies can be applied throughout the payment process. In turn, advances in integration software make the end-to-end process so much easier. That’s why MasterCard embeds its solutions within an integrated eSettlements hub.
Greater use of lodged and embedded cards will have a dramatic infl uence in speeding up and ‘leaning’ the payment process – and have the added advantage of taking plastic out of the system as well as paper.
Changing the way the NHS buys products and services can save a terrifi c amount of money from the public purse. It can also provide a range of auxiliary benefi ts across various policy areas.
MasterCard believes that the key to achieving successful reform of the way procurement works in the health service is to embrace technological advances which make the procurement process easier and which are based on the principles of control, transparency and auditability.
Steve Shirley FOR MORE INFORMATION
Visit
www.mastercard.co.uk/publicsector national health executive May/Jun 11 | 57
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